With a deposit that runs on your child, the first €9744 (basic allowance) are tax-free in 2021. In addition, there is the savings allowance of €801. This means that €10,545 in share profits are tax-free in 2021. If the basic allowance has not been exhausted, securities can be sold at a profit and immediately bought again. Thus, the acquisition costs increase, which later leads to reduced taxable profits. If you have a depot yourself, you can Transfer shares tax-free to your child and make optimal use of the allowance of €10,000 using the FIFO principle.
Many readers here should already be saving stocks or ETFs for themselves. Since the stock market is in a long bull phase, hopefully these stocks or ETFs have experienced a significant increase in value since purchase. So what can you do to let your children participate in this increase in value?
Shares and securities transferred to children tax-free
Instead of giving money to the children, you can transfer securities with unrealized gains to your child tax-free. This usually makes more sense. Thus, profits that have not yet been realized go into the kids' depot. in the child depot the profits can then be realized tax-free with the child's allowance of around €10,000.
FIFO - Another booster in carry
When transferring shares, remember that this is done according to the FIFO principle. FIFO means First In First Out. The oldest shares are transferred first. These are usually the shares that have experienced the greatest appreciation in value. So the transfer is really worth it again. If available, you can of course also use some "lucky shots" from your depot with 100 % and more profit to your child tax-free and then realize the profit there.
You can refill your own depot after the transfer. For this you use the money that you would otherwise have put into the child's savings plan.
How do you like the tip transfer shares tax-free to child? did you already know him
Small print on shares and securities transferred tax-free to children
There are limits to how much money you can transfer to your child before the child becomes insured themselves. The Bafög entitlement can also be lost or the allowances for donations can even be exceeded. The item Depot for children: securities, taxes, pitfalls takes a closer look at the topic.To the Junior Depot comparison